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Small businesses being buried by blizzard of new regulations

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Sue Kirchhoffer, owner of Moravian Florist in New Dorp, fears new regulations -- such as paid sick leave for businesses with five or more employees, mandates of the Affordable Care Act to provide health insurance come 2016 for companies with 50 or more workers or and the minimum wage hike -- will put a lot of small merchants out of business.
(Advance photo/Anthony DePrimo)

STATEN ISLAND, N.Y. - Sue Kirchhoffer, owner of Moravian Florist in New Dorp, counts her blessings that she was able to leave poverty in her native Korea to become part of a very successful family-owned floral business.

"People say the recession is over, but we don't see it, and with all these regulations things will likely get worse," said Ms. Kirchhoffer, whose husband's grandparents started Moravian Florist in 1927.

Business leaders recognize that the regulations facing small merchants will likely change the way they do business in the borough.

"Over the last couple of years many small businesses have seen their profit margin decrease. Business owners are now looking at the entire package they offer to their employees. Right now I think small businesses are keeping an eye on their costs and how much money they can spend," said Linda Baran, president of the Staten Island Chamber of Commerce.

"Usually, your salaries, insurance and fringe benefits are a big cost to the employer. In recent years, you've seen a lot of cost sharing and that's the way employers have tried to manage health care costs."

Sal Sottile, owner of the St. George-based Sottile Security International, who employs more than
300 security guards and administrative staff, says the new regulations are causing him to
revamp his business.

"All these regulations are equally damaging to my business...I'm being forced to take a look at how we've done things in the past and the benefits we were giving to employees in the past, and now I have to give something on top of what I was already giving. In tough economic times you can't do both," said Sottile.

Sal Sottile, owner of the St. George-based Sottile Security International, has more than 300 employees, and he says the new regulations are causing him to revamp his business.Advance photo/Jan Somma-Hammel

He says his only alternative is to pass the extra cost onto his customers, but then he risks losing business.

Steven Coppola, owner of APB Security Systems in Bloomfield, has found himself in the same boat.

"With everybody looking to tap into our pockets, it starts not to be worth all the effort...I'm afraid all this (regulation) is opening Pandora's box, and the next step will be paid vacation and paid holidays," he said, noting he has 15 employees.

PAID SICK LEAVE

As of April 1 businesses with five employees or more had to comply with giving five paid sick days to workers. But many Island businesses say the hardship with Mayor Bill de Blasio's new law is the underlying cost.

"Paid sick leave takes the incentive away from the workers who want to be good employees...It essentially allows them to get a paid week of vacation in addition to their vacation," said Steve Margarella, owner of Margarella Asphalt & Concrete in Port Richmond.

Said Sottile, "With
paid sick leave I have to pay the individual who is sick then I have to pay the
individual who replaces him on the job site, most often with
overtime
pay. So I'm paying twice the amount, plus an over time number. The exact
people this bill is trying to help it actually hurts."

And Sottile and Margarella aren't alone.

"A lot of small businesses on the Island are struggling with paid sick leave. This was something they didn't have to provide and now they have to provide it," said Dean L. Balsamini, executive director of the Staten Island Small Business Development Center.

"Generally, in these businesses you have a key person, and now you have to have back up if that person is sick," he added.

OBAMACARE MANDATE

Although the Affordable Care Act mandate for businesses with 50 employees or more doesn't take effect until 2016, some merchants are already feeling the impact of "Obamacare."

"Obamacare has not helped us at all. We are finding we have to pay more for the insurance we have for our employees, and many doctors aren't accepting the new plans," said Ms. Kirchhoffer.

She said her florist used to pay all or part of their employees' premium costs, but this is getting harder with the rising costs of health care.

"We can't just keep absorbing the cost of healthcare for our employees...We just can't afford it, and our employees see that as well," she said.

Ms. Kirchhoffer said all the regulations will force small business owners to reduce their staffs, thus creating more length to the unemployment line.

"We had to cut some of our full time employees to four days a week," said Ms. Kirchhoffer.